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If the broker is merely there protecting someone else's interest and if that action is an action on the merchandise rather than a personal action which is the normal situation in other Federal and State courts, then I think that if the counterclaim provision does remain in—which we don't think it should—then it should be done in very, very limited situations.

Mr. ALTIER. I have no further questions.
I want to thank you for your testimony.
At this time the hearing is adjourned.
[Whereupon at 11:45 a.m., the subcommittee was adjourned.]

CUSTOMS COURTS ACT

TUESDAY, JUNE 27, 1978

U.S. SENATE
SUBCOMMITTEE ON IMPROVEMENTS IN

JUDICIAL MACHINERY OF THE
COMMITTEE ON THE JUDICIARY,

Washington. D.C. The subcommittee met, pursuant to recess, at 8:05 a.m. in room 4232, Dirksen Senate Office Building, Senator Dennis DeConcini (chairman of the subcommittee) presiding.

Staff present: Romano Romani, staff director; Michael J. Altier, deputy counsel, Kathryn M. Coulter, chief clerk; Pamela Q. Phillips, assistant chief clerk; and Lance H. Robbins, staff assistant.

Senator DECONCINI. The subcommittee will please be in order.

We are here this morning to begin the second day of hearings on S. 2857, the Customs Court Act of 1978.

Last week the subcommittee heard from the Honorable Edward D. Re, Chief Judge of the U.S. Customs Court; members of the Department of Justice; and distinguished representative of the International Trade Commission, the U.S. Customs Service, the American Bar Association, the American Importers Association, and others.

It is generally acknowledged that while the Customs Court Act of 1970 did provide for the badly needed reform of the procedures of the Customs Court, these efforts did not go far enough toward meeting the demands of a burgeoning international trade industry.

As we are all aware, the expansion of international trade and the importance placed upon the need for a quick resolution of disputes involving imports, has been accompanied by an increase of litigation in the courts. At the same time, the jurisdictional statutes relating to the jurisdiction of the Federal courts, including the Customs Court, have remained relatively unchanged. This has had some serious effects.

It is with this in mind that we have introduced the Customs Courts Act of 1978. The bill is designed to increase the substantive jurisdiction of the U.S. Customs Court and expand the types of relief it may award in an effort to eliminate the jurisdictional complexities which now exist. It is our concern that we utilize the court's expertise to the best advantage and insure uniformity in a field which particularly requires nationwide consistency.

It became evident at last Friday's hearings that the bill is not without some difficulties. It is our intention to work closely with all interested parties in an attempt to reach a satisfactory agreement on the more controversial aspects of the proposal as soon as possible, inasmuch as it is nearing the end of the 95th Congress.

It is our hope that these hearings will further enable us to better understand the implications and ramifications of S. 2857 and its impact upon the world of international trade.

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Our first witness will be the Honorable Howard T. Markey who will lend us his expertise as Chief Judge of the U.S. Court of Customs and Patent Appeals to give us some insight on how this bill will affect trade litigation in the courts.

He will be followed by Peter M. Gerhart, Assistant Professor of Law at Ohio State University and consultant to the Administrative Conference of the United States. He will be accompanied by Jeffrey S. Lubbers, staff attorney, also with the Administrative Conference.

Our witnesses today also will include Andrew P. Vance representing the Association of the Customs Bar; Dr. Rudy Oswald, research director for the AFL-CIO; Wayne Jarvis on behalf of the St. Paul Fire & Marine Insurance Co.; and Donald W. Paley on behalf of the New York County Lawyers Association. Mr. Paley will be accompanied by Norman Schwartz.

STATEMENT OF HON. HOWARD T. MARKEY, CHIEF JUDGE, U.S.

COURT OF CUSTOMS AND PATENT APPEALS

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Senator DECONCINI. I would like to ask the witnesses to have their full statements in the record. We have a scheduled vote at 10 this morning on a treaty which will require my leaving. The hearings will have to conclude by 10:45 a.m.

Judge Markey, I want to thank you for taking the time to help us with this legislation. I wish you would express my gratitude to your court and your members for allowing you to attend. Please proceed.

Judge MARKEY. Mr. Chairman, it is a pleasure to be here. I understand my prepared statement will go into the record.

Senator DECONCINI. Judge Markey, at this point we will insert your written statement into the record, as well as the biographical material that you have given us.

[Material follows:]

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STATEMENT OF CHIEF JUDGE HOWARD T. MARKEY

Mr. Chairman and members of the subcommittee, I appreciate the opportunity to visit for a few moments about what I consider a fundamental and far-reaching legislative effort toward improvement in the administration of justice. Though S. 2857 relates to customs and international trade, and to the United States Courts created, financed, and monitored by the Congress for the administration of justice in those fields, it can have unseen but pervasive effects upon the lives of most Americans. All who are given the privileged joy of joining with you in man's noblest work, the administration of justice--the judges, the lawyers, and representatives of the Department of Justice—are grateful for the many hours. devoted by this Subcommittee and its fine staff to the development of S. 2857.

That is particularly true of the judges, whose daily lives will be so directly affected by S. 2857. I have long held, and often publicly expressed, the view that a judicial approach to the Congress which merely sought or resisted an increase in a court's jurisdiction would be unseemly, inappropriate, and properly counterproductive. The prerogative, and the Constitutional duty, of establishing the substantive jurisdiction of the several federal courts is solely that of the Congress. It is the duty of the courts, as public institutions supported by public funds, to exercise to the best of their ability those jurisdictional powers that may be. granted them by the Congress. That is not to say, however, that Congress should not invite judicial suggestions on how best to accomplish the judicial duties imposed, or that judges should not respond promptly and fully to such an invitation.

The congressional function is not completed by the mere provision of increased jurisdiction. As many have suggested, congressional provisions of new rights to

sue are empty gestures, without concomitant provision of the tools needed to make those rights effective, and without consultation with those who must work toward that goal. No one wants to slam the doors of the federal courts; yet the effect is the same if those doors are jammed by the crowds. As I view S. 2857, it does not create that problem.

Hence, Mr. Chairman, I view it as incumbent upon this Subcommittee, and upon the Congress, to determine wherein there may be a need for improvement in the administration of justice. Should that need entail an expanded jurisdiction in a court of the United States, it is certainly useful and advisable that the Subcommittee hear from that court. I would suppose that the court would respond with its views regarding how the improvement can be accomplished, and citing whatever specific problems can be foreseen in the court's exercise of its new jurisdiction. It would then be, I would suppose, for the Subcommittee and the Congress to determine wherein lay the balance, i.e., whether provision of additional funds or staff, or other solutions to the specific problems cited, would be justified by the improvement sought in the measure under consideration. In so doing, I would suppose also, the Congress would consider the present number of judges, the size of the staff, the present workload, the facilities, and the resources of the court involved, and would compare the totality of that capacity with the legislative goal under consideration.

Happily, the work of the Subcommittee staff and of the Department of Justice has thoroughly explored the interests and needs of justice in this instance, and the Subcommittee has elected to hear from all who will be charged with seeing to it that the purposes and goals of S. 2857 are achieved. I have been particula rly impressed with the effort expended by the Executive Agencies affected in S. 2857, and by their willingness to accept additional judicial review of their actions. Though the positions they take are the function of the agencies, not the courts, I feel compelled to report my most favorable impression of their dedication to justice in this instance. Representatives of all involved agencies attended our annual Judicial Conference last month, at which the provisions of S. 2857 were explored as a part of our formal program.

Expressing so strongly, Mr. Chairman, my appreciation of your invitation, it seems incumbent upon me to suggest some shortcomings in S. 2857. But the contrary is the case. The United States Court of Customs and Patent Appeals presently foresees no difficulty, and no need for additional funds or staff, in carrying out any increase in duties likely to ensue upon passage of S. 2857. Our court is somewhat proud, Mr. Chairman, of having cut its 1972 proposed budget back to its 1971 appropriation, and of having held its administrative expenditure requests at the 1971 level through fiscal 1977. Between 1972 and 1974, the court reduced the interval from appeal to decision, from the three-year interval it had been for over a decade, to the present interval of nine months. I mention that history as illustrative of the court's philosophy, which requires that it unhesitatingly request needed assistance, but only after, not before, that need is clear.

The majority of the provisions of S. 2857 deal with jurisdiction and procedures of the United States Customs Court. Because the judgments of the Customs Court are appealed to us, we are affected by almost everything affecting that court. Still, in considering those provisions relating to the Customs Court, though an unpredictable increase in the number of appeals can be expected, we presently find no provision likely to require that our court seek additional funds or staff.

At this writing, Mr. Chairman, I understand that the scholarly and distinguished Chief Judge of the United States Customs Court, the Honorable Edward D. Re, will have appeared before your Subcommittee prior to my appearance. Because I was required to attend a meeting of the Subcommittee on Judicial Improvements of the Judicial Conference of the United States on June 23rd. I was unable to accept your thoughtful invitation to appear on the same day with my Brother Re, and our heavy schedules have precluded an opportunity to consult with him or learn his views prior to preparation of this statement.

I share with so many others in the federal judiciary a profound personal respect and admiration for Chief Judge Re. His integrity, and his deep knowledge of the law, gained as teacher, administrator, practitioner and judge, have justly earned for him a reputation known and envied by all who are true professionals in the law. With respect to virtually all matters touching upon the operations of the Customs Court, however, I understand that a tradition of majority rule has prevailed for many years among the nine distinguished and long-experienced -trial judges who constitute that court. I am not privy, nor should I be, to the deliberations of those fine judges with respect to the operations of their court.

Not being a trial judge assigned to that court, and not having to undertake whatever new duties may be imposed on the individual judges as they conduct individual trials within an expanded jurisdiction, I would find it inappropriate to comment on the inner workings of the court. The capacity and capability of the judges of the Customs Court to exercise the jurisdiction envisaged in S. 2857 may be objectively determined, as I have indicated, as well by this Subcommittee as by me or by other observers.

Concerning the specific provisions of S. 2857 directed to our court, we note first § 1541(b) which properly and necessarily makes the exercise of the injunctive powers given the Customs Court reviewable on appeal. We foresee no difficulty there, or with § 1546(a). Nor do we foresee any problem with & 1546(b), viewed as a reaffirmation of the existing powers the court has been exercising over the years as an Article III, Constitutional Court.

Subsection 1546 (C), granting exclusive jurisdiction with respect to license actions of the Secretary under $ 641 (b) of the Tariff Act of 1930, happily provides for the basis of review set forth in 28 USC 2072 and 28 USC 2112. I am no expert in draftsmanship, but because the licenses involved in § 1546 (C) (1) and § 1546(c) (2) are both provided for in $ 641(b), it may be useful to consider a consolidation of those provisions.

Subsection 1546 (d), like the other provisions of S. 2857, interposes no problem, and wisely provides the basis for review found in § 250 of the Trade Act of 1974, but the Subcommittee may wish to consider a minor amendment. The last sentence, if intended to preclude review of all other decisions of the Secretary of Commerce, would appear to be in conflict with existing $ 1544, which provides for review in our court of decisions of the Secretary concerning free entry of certain goods under the Tariff Schedules of the United States. If that conflict be real or apparent, it might be cured by adding "except as otherwise provided by law” at the end of the sentence.

Section 1546 concludes with a sentence apparently applicable to all of its subsections and forbidding injunctions and writs of mandamus. It may be well to consider limiting that sentence to subsections 1546 (c) and (d), if such were the intent. If the sentence be applicable to all subsections, it would appear in conflict with § 1546 (b). The court expresses no wish to issue injunctions, or to be freed of the duty to do so, under this or any other law. Neither does it wish to issue or avoid issuing writ of mandamus. The Federal Rules of Appellate Procedure, though not applicable to our court, were made applicable by our own Rules in 1974, with respect to all matters not requiring a special rule because of a statute or the nature of our work. The Federal Rule of Appellate Procedure 21 provides for writs of mandamus. We are certain that the Subcommittee intends no conflict with the All Writs Act, 28 USC 1651, under which our court, like all courts, must have the power to issue such writs as may be necessary to the preservation of its jurisdiction. If, therefore, the intent is to avoid injunctions and writs of mandamus touching upon the actions of the Secretaries on licenses and assistance to workers, etc., an intent with which we would certainly have no quarrel, it may be advisable to designate the last sentence as § 1546(e), and to insort after “under," the words "subsections (c) and (d)."

The amendments to 28 USC 2601, concerning cross-appeals and elimination of assignments of error are also welcome. They conform our practice to that under the Federal Rules of Appellate Procedure, which, as I indicated, we have been applying wherever appropriate. There is no problem apparent in the 28 USC 2602 provision for precedence and expedition.

In sum, Mr. Chairman, we welcome and appreciate the Subcommittee's effort to imnrove the administration of instice in the fields of customs and international trade, as reflected in S. 2857. We presently foresee no insurmountable difficulty in carrying out the responsibilities which will be imposed when the bill is enacted. In that regard, Mr. Chairman, the Court of Customs and Patent Appeals will extend every effort to achieve the goals and purposes of S. 2857, and will not hesitate to inform your Subcommittee of any insurmountable difficulty encountered in carrying out that responsibility. Should the Subcommittee from time to time so desire, we will be pleased, at the call of the Chairman, to report on our progress toward the improvement in the administration of justice envisaged in S. 2857.

Again. Mr. Chairman, I express apnreciation for the opportunity of commenting on the bill now before your Subcommittee, and will be pleased to answer any question you may wish to ask respecting the operation of the United States Court of Customs and Patent Appeals.

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